The role is being filled at a crucial juncture in the future of UKFI, which operates at "arm's length" to the Treasury. The looming general election is creating uncertainty about the future of the bailed-out banks as the shadow chancellor has proposed a major public share-selling programme, reminiscent of the "tell Sid" privatisations of the Thatcher government.

It also comes amid news that the proposed sale of 320 RBS branches has hit a stumbling block, with prospective bidders told that the network relies upon funding from the Bank of England, which they must replace.

The role of head of market investments at UKFI is being created following the departure of John Crompton, the former Merrill Lynch banker who quit after failing to get the chief executive's job.

Crompton's role had originally been split between Robin Budenberg, who beat Crompton to the top job as chief executive, and Tim Sykes, senior banks analyst, now head of market investments strategy.Many City analysts think it is unlikely that it will be possible to sell off the shares for two years if the taxpayer wants to make a profit on the investments made during 2008. Even so, UKFI will need to have a wide range of options ready so that a decision can be made by the government following the forthcoming general election, and the successful candidate will play a key role in testing the market's appetite for major share sales.

UKFI has used Odgers Berndtson in the past but severed its links in September after the headhunters hired Johnny Cameron, a banker who used to run RBS's investment bank.

It is thought that the role will only be responsible for devising a strategy for selling off the shares in RBS and Lloyds Banking Group rather than overseeing Northern Rock and the troubled parts of Bradford & Bingley which were not transferred to Spanish bank Santander.

Northern Rock is due to report its 2009 figures on Wednesday amid much scrutiny of the extent of the losses at the business which was nationalised in February 2008. While hopes of a sale before the general election have now been quashed, its chief executive Gary Hoffman will face questioning about how quickly he thinks a sale can be achieved.

Northern Rock has itself been split into a "good" and "bad" bank – which is likely to be merged with the mortgage operations of B&B. The Treasury hopes that both the good and the bad parts of Northern Rock will attract buyers, although some obvious contenders, such as Tesco, have ruled themselves out.